Helios and Matheson Analytics Inc (HMNY): Here’s Why MoviePass Driving More Moviegoers into the Theater Means Good Things for the Industry

FBR's Eric Wold spotlights a box office tailwind ahead thanks to MoviePass' rocket-fire momentum in attracting subscribers to theaters.


Helios and Matheson Analytics Inc (NASDAQ:HMNY) is angling to make a Netflix-known name in the movie theater market- thanks to a majority 62% hold in MoviePass. It appears consumers are loving the platform’s cheap subscription unlocking monthly movie screenings, as MoviePass just soared right on past 2 million subscribers last Thursday.

Considering this is a platform that had already hit 1.5 million in its subscriber base a mere one month prior, MoviePass is flashing a powerhouse drive- showing no signs of stopping. With a solid 2 million in tow, MoviePass is paving the way for more growth, lowering the annual subscription cost even further.

On Friday, MoviePass unveiled plans to expand out its limited-time yearly deal that had been an exclusive arrangement with CostCo around year-end. Before, a $9.95 monthly subscription offered Movie Pass users one movie each day. Now? The tech player is gunning for even more movie theater market share, serving up a yearly $7.95 subscription per month, Fandor streaming library access for a full year included. For context, Fandor presently has a standalone yearly subscription that stands at a whopping $90.

FBR analyst Eric Wold sizes up MoviePass as a “positive industry driver,” and even though he does not provide a rating on HMNY, the analyst spotlights a gilded path ahead.

After all, this is a service that boasted solely 30,000 users this past summer, magnetizing over 2 million subscribers now- ever since the price was lowered to an attractive $9.95.

In a nutshell, Wold boils down his optimism to “two things [that] have increasingly become clear with the success of the service in its ramp,” writing: “1) the service has proved popular with moviegoers; and 2) the company needs to ramp its generation of alternative revenue streams to offset the negative cash flow associated with each monthly subscription (where the cost of just one movie ticket per month is greater than the monthly subscription price). […] we believe, in addition to the valuable moviegoer data being collected, there is an opportunity for MoviePass to partner with exhibitors and studios alike to drive incremental business to those theaters and to those films — in a way that is economical for all parties involved. The question will be whether or not those alternative revenue streams can ramp fast enough to bring MoviePass to break-even/positive cash flow before the company’s sources of external capital dry up.”

Ultimately, for the exhibitor chains under Wold’s coverage, this fired-up ramp bodes as a key prospect that could foster more attendance; creating a box office tailwind not only for this year, but down the line. The analyst spotlights a benefit for small and independent films in theaters, believing this tech player has encouraging data that subscribers now have better odds to see these. With prospective box office benefiting throughout the year, the analyst is relishing MoviePass’ shakeup of the movie theater market.